WiMAX? More like WiMIN as another operator shuts up shop

25 Jun 2010

Dutch WiMAX service provider Worldmax has announced the imminent closure of its service in Amsterdam from 1 August, a year after it launched an 802.16e network in 2009 under the brand name ‘aerea’. The start-up blamed the decision on the Dutch government and in particular the Ministry of Defense (MoD). At the end of last year Worldmax was told its operations were causing major interference with satellite stations in Burum owned by the MoD, following which the state placed restrictions on its 3.5GHz operating licence. Worldmax says the decision made it impossible for it to expand although local industry watchers says other factors in its demise include its failure to secure a 2.6GHz licence, the economic downturn, the network’s lack of roaming and poor indoor coverage.

The chief executive officer of Worldmax, Keimpe B Algra, explained the decision saying: ‘This restriction imposed by the Ministry of Defense makes us feel like landowners being expropriated on the basis of National and European security. The disillusion amongst us and our shareholders was huge when we saw investments made becoming immediately worthless. While I am relieved that we could settle the issue after months of negotiation and uncertainty, it does hurt me badly to conclude that this is the end of a well established mobile broadband venture. This is bad news for our customers and a depletion of the already impoverished telecoms market in the Netherlands’.

TeleGeography’s 4G Research Service – which follows worldwide developments in wireless broadband technologies such as LTE and WiMAX – notes that Worldmax was founded in August 2006 by Intel Capital, the venture capital arm of the leading chip producer, and Enertel Holding (80% owned by Greenfield Capital). At the establishment of Worldmax, Intel provided capital and WiMAX expertise, with Enertel providing funding and the existing twelve-year nationwide 3.5GHz licence. Enertel paid just over EUR4 million for 80MHz of spectrum in a December 2003 auction. Its investors have committed USD37 million to launch the network, with Greenfield Capital likely lose nearly USD15 million.

Only last week UK WiMAX operator Freedom4 shut up shop when its owner Daisy Group sold the business to its rival UK Broadband. Freedom4 (formerly Pipex Wireless) was formed in April 2006 by Pipex Communications and Intel Capital to develop and roll out a WiMAX-based network in the UK. The company was kept separate from ISP Pipex Communications, which was sold off to Tiscali in 2007. On 1 July 2009 Freedom4 acquired internet service provider Daisy Communications and the group was subsequently renamed Daisy Group, with the Freedom4 name being retained to cover the group’s wireless broadband operations. Daisy Group sold its loss-making WiMAX spectrum licences to UK Broadband for GBP12.5 million (USD18.4 million) in a cash deal.